Daljit Kaur, Hoshiarpur V. The Income Tax Officer, Hoshiarpur

ITA 96/ASR/2017

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 1202 (ITAT-AMRITSAR)
• Duration Of Justice: 2 year(s) 3 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-06-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 28-03-2019
• Assessment Year: 2011-2012
• Appeal Filed On: 17-02-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: SUDARSHAN KAPOOR
• Keywords: Unexplained investment
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH, AMRITSAR (SMC) BEFORE SH. SANJAY ARORA, ACCOUNTANT MEMBER I.T.A. NO. 96/ASR/2017 AS SESSMENT YEAR: 2011-12 DALJIT KAUR W/O TILAK RAJ, C/O SHER-E-PUNJAB RESORTS, VPO PADRANA, TEH. GARHSANKAR, DISTT. HOSHIARPUR [PAN: BMCPK 7540J] VS. THE INCOME TAX OFFICER, WARD-1, HOSHIARPUR (APPELLANT) (RESPONDENT) APPELLANT BY : SH. SUDARSHAN KAPOOR (ADV.) RESPONDENT BY: SH. CHARAN DASS (D .R.) DATE OF HEARING: 29.03.2019 DATE OF PRONOUNCEMENT: 04.06.2019 ORDER PER SANJAY ARORA, AM: THIS IS AN APPEAL BY THE ASSESSEE DIRECTED AGAINST THE ORDER BY THE COMMISSIONER OF INCOME TAX (APPEALS)-1, JALANDHAR ( 'CIT(A)' FOR SHORT) DATED 13.01.2017, DISMISSING THE ASSESSEES APPEAL CONTES TING HER ASSESSMENT UNDER SECTION 143(3) OF THE INCOME TAX ACT, 1961 ('THE AC T' HEREINAFTER) DATED 05.3.2014 FOR THE ASSESSMENT YEAR (AY) 2011-12. 2. THE APPEAL RAISES TWO ISSUES, EACH OF WHICH SHAL L BE TAKEN UP IN SERITAM. THE ASSESSEE, A NON-RESIDENT INDIAN (NRI), FALLING UNDE R THE STATUS OF A RESIDENT UNDER THE ACT IN VIEW OF HER STAY IN INDIA DURING THE REL EVANT PREVIOUS YEAR (F.Y. 2010-11) BEING FOR A PERIOD OF MORE THAN 182 DAYS, PURCHASED A MARRIAGE PALACE (BY THE NAME SHER-E-PUNJAB RESORTS) AT VILLAGE PADRANA, T EH. GARHSHANKAR, DISTRICT ITA NO. 96/ASR/2017 (AY 2011-12) DALJIT KAUR V. ITO 2 HOSHIARPUR, VIDE SALE DEED DATED 10.12.2010 FOR A C ONSIDERATION OF RS.121.72 LACS, PAYING ANOTHER RS.20.78 LACS TOWARD CROCKERY/UTENSI LS, FURNITURE, ACS, ETC., I.E., AT A TOTAL COST OF RS.142.50 LACS. THE ENTIRE PAYMENT WAS MADE FROM THE NRE (NON- RESIDENT EXTERNAL) ACCOUNT (WITH AXIS BANK) OF HER HUSBAND, SH. TILAK RAJ, ALSO A NRI. THE ISSUE ARISING IS THE DIFFERENCE IN THE STA MP DUTY SUFFERED AND PAID ON THE SAID TRANSACTION OF PURCHASE OF IMMOVABLE PROPERTY. THE ASSESSEE CLAIMS TO HAVE PAID IT AT A TOTAL OF RS.4,05,500/-, AS UNDER: (AMOUNT IN RS.) (A) STAMP DUTY : 3,65,500/- (B) REGISTRATION CHARGES : 30,000/- (C) OTHER MISCELLANEOUS EXPENSES : 10,000/- THE COMPUTERIZED ASSESSMENT OF THE STAMP DUTY WAS A T RS.7,30,320, I.E., THE HALF OF WHICH IS RS. 3,65,160, SO THAT THE DIFFERENCE WAS R EGARDED AS PAID OUT OF UNACCOUNTED SOURCES. IN THE VIEW OF THE REVENUE, TH E ASSESSEE HAD NOT EXPLAINED THE SOURCE FOR ANY SUM, SO THAT A SUM OF RS. 7,40,3 20, I.E., INCLUSIVE OF MISCELLANEOUS EXPENDITURE AT RS. 10,000/-, WAS DEEM ED AS HER UNDISCLOSED INCOME BY WAY OF UNEXPLAINED INVESTMENT, I.E., AS TO ITS SOURCE. AGGRIEVED, THE ASSESSEE IS IN SECOND APPEAL. 3. I HAVE HEARD THE PARTIES, AND PERUSED THE MATERI AL ON RECORD. THE FINDING BY THE LD. CIT(A) IS AS UNDER: 13. THE ASSESSING OFFICER HAS ALSO PRODUCED A CER TIFICATE GIVEN BY THE SUB REGISTRAR, GARHSHANKAR STATING THAT THE TOTAL PAYMENT MADE BY THE ASSESSEE WAS RS.3,95,540 /- AS ABOVE. THE ASSESSEE HAS PRODUCED THE ORIGINAL DURING THE C OURSE OF HEARING. THE ASSESSING OFFICER HAS ALSO VIDE HIS LETTER DATED 05.12.2016 STATED TH AT HE HAS NO OBJECTION IF THE ADDITION IS RESTRICTED TO RS.3,95,540/- WITH SUBJECT TO VERIFIC ATION OF THE AUTHENTICITY OF THE CERTIFICATE. DURING THE COURSE OF HEARING, THE ASSESSEE STATED T HAT STAMP DUTY WAS PAID OUT OF FUNDS WITHDRAWN FROM THE ACCOUNT OF HER HUSBAND SH. TILAK RAJ, WITH AXIS BANK, BANGA BRANCH. ITA NO. 96/ASR/2017 (AY 2011-12) DALJIT KAUR V. ITO 3 HOWEVER, IT CAN BE SEEN THAT ON THE SAME DAY OF WIT HDRAWAL OF RS.6.00 LAKH THE ASSESSEE HERSELF HAS DEPOSITED RS.2,00,000/- IN THE SAME BAN K ACCOUNT. THIS TRANSACTION THEREFORE LEAVES MUCH IN DOUBT. WHY WOULD ANY PERSON DURING N ORMAL COURSE OF BUSINESS DEPOSIT RS.2,00,000/- IN CASH IN A BANK ACCOUNT AND THEN WI THDRAW RS.6,00,000/- ON THE SAME DAY AND USE RS.3.95/- LAKH OUT OF IT FOR PAYMENT OF STA MP DUTY AND OTHER CHARGES. THIS TRANSACTION DEFINES (*) LOGIC, AND I SEE NO REASON TO ACCEPT TH E EXPLANATION OF THE ASSESSEE, AND NO REASON TO INTERFERE IN THE ORDER OF THE ASSESSING OFFICER. [(*) DEFIES] THERE IS A WITHDRAWAL OF RS.6 LACS IN THE BANK ACCO UNT OF SH. TILAK RAJ ON 10.12.2010 (I.E., THE DATE OF REGISTRATION OF THE S ALE DEED), AS WELL AS A DEPOSIT OF RS.2 LACS ON THE SAME DAY, AND WHICH IS THE STATED SOURCE OF THE IMPUGNED PAYMENT (PB PG. 21). THE ENTIRE PURCHASE CONSIDERATION OF R S.142.50 LACS, SATISFACTORILY EXPLAINED, IS FROM THE BANK ACCOUNT OF SH. TILAK RA J. HOW, THEN, COULD THE ASSESSEES EXPLANATION OF THE SOURCE, I.E., TO THE EXTENT OF RS.4 LACS, ONE WONDERS, BE NOT ACCEPTED? AS REGARDS THE QUANTUM OF STAMP DU TY, IT STANDS EXPLAINED THAT WHILE THE STAMP DUTY AT THE NORMAL RATE WORKS TO RS . 7,30,320, AS A MEASURE OF INCENTIVE BY THE STATE GOVERNMENT, A REBATE OF 50% IS ALLOWED WHERE THE SALE DEED TO BE REGISTERED IS IN THE FAVOUR OF A FEMALE, AND WHICH EXPLAINS THE REDUCED RATE OF DUTY. THE STAMP DUTY ENDORSEMENT ON THE BACK SIDE O F THE SALE DEED WHICH IS ON STAMP PAPERS FOR RS.3.65 LACS, AT RS. 7,30,320/-, H AS BEEN, ON APPLICATION, CERTIFIED BY THE SUB-REGISTRAR TO BE INCORRECT, AND THAT THE STAMP DUTY PAID IS ONLY RS. 3,65,160/- (PB PGS. 17 20), WHICH IN FACT STANDS ACCEPTED EVEN BY THE ASSESSING OFFICER (AO) IN THE REMAND PROCEEDINGS. NO CASE FOR THE IMPUGNED ADDITION, TO ANY EXTENT, IS MADE OUT. THE ADDITION, SUSTAINED AT THE IMPUGNED SUM OF RS.7.30 LACS, IS ACCORDINGLY DIRECTED FOR DELETION. I DECIDE ACCORDI NGLY. 4. THE SECOND ISSUE IS QUA THE SOURCE OF RS.5 LACS DEPOSITED IN THE ASSESSEES NON RESIDENT ORDINARY (NRO) ACCOUNT WITH AXIS BANK ON 17.01.2011. THE ITA NO. 96/ASR/2017 (AY 2011-12) DALJIT KAUR V. ITO 4 ASSESSEES EXPLANATION THEREOF AS BEING THE CASH WI THDRAWAL OF RS.12 LACS BY HER FROM THE SAID ACCOUNT ON 14.9.2010, WAS NOT ACCEPTE D BY THE AO AS THE ASSESSEE HAD EARLIER, I.E., VIDE LETTER DATED 15.01.2014, ST ATED THE CASH, WITHDRAWN THUS, AS GIVEN TO HER RELATIVES ON CREDIT. THE ADDITION STAN DS CONFIRMED IN FIRST APPEAL; THE LD. CIT(A) HOLDING AS UNDER: 16. DURING THE COURSE OF APPELLATE PROCEEDINGS THE ASSESSEE REITERATED WHAT HAD ALREADY BEEN SUBMITTED BEFORE THE ASSESSING OFFICER, THAT T HIS DEPOSIT WAS OUT OF RS.12,00,000/- WITHDRAWN FROM HER ACCOUNT ON 14.09.2010. IT CAN BE SEEN FROM THE COPY OF THE CASH FLOW STATEMENT FILED BY THE ASSESSEE ON 17.05.2016 THAT AFTER THE SAID WITHDRAWAL OF RS.12,00,000/- ON 14.09.2010, THE ASSESSEE HAS MADE SEVERAL ROUND FIGURE LARGE WITHDRAWALS AND DEPOSITS DURING THE PERIOD FROM 14.09.2010 TO 17.01.2011. WH EN THE ASSESSEE ALREADY HAD CASH IN HAND OF RS.5.00 LAKH ON 01.10.2010, SHE AGAIN WITHD REW A SUM OF RS.7.00 LAKH ON 07.12.2010. SHE DEPOSITED RS.7.00 LAKH AGAIN ON 05. 01.2011 AND IMMEDIATELY WITHDREW RS.7,50,000/- ON 13.01.2011 TO SPEND ON RENOVATION, EVEN THOUGH SHE PURPORTEDLY HAD A CASH IN HAND OF RS.5.00 LAKH. THE STORY OF THE ASSESSEE THEREFORE REGARDING THE AVAILABILITY OF RS.5.00 LAKH TO DEPOSIT ON 17.01.2011 OUT OF A SUM WITHDRAWN FOUR MONTHS EARLIER IS DIFFICULT TO DIGEST. FURTHER DURING THE FINAL HEARING ON 11.0 1.2017 THE ASSESSEE CAME UP WITH ANOTHER CONTENTION THAT SHE HAD BROUGHT A SUM OF 5000 EUROS FROM PORTUGAL TWICE WHILE VISITING INDIA ON 01.04.10 AND 14.09.2010. THUS, WITH THE CONVERSI ON RATE OF RS.70 PER EURO SHE HAD WITH HER AN AMOUNT OF RS.7,00,000/- IN SUPPORT OF THIS S TATEMENT THE ASSESSEE HAS NOT PRODUCED ANY DOCUMENTS. THIS IS ALSO THE FIRST TIME THAT ANY MENTION OF EUROS BROUGHT TO INDIA HAS BEEN MADE BY THE ASSESSEE EITHER IN ASSESSMENT OR A PPELLATE PROCEEDINGS. NO SOURCE OF THE SAME HAS BEEN INDICATED BY THE ASSESSEE. 17. THEREFORE 1 HAVE LITTLE INCLINATION TO ACCEPT T HIS LAST MINUTE CONTENTION OF THE ASSESSEE. 18. THE ASSESSING OFFICER HAS ALREADY BROUGHT OUT T HE INCONSISTENCIES REGARDING THE ASSESSEES CONTENTION OF THE SOURCE OF DEPOSIT OF R S.5,00,000/- BEING A WITHDRAWAL OF RS. 12,00,000 MADE FOUR MONTHS EARLIER. THERE WAS NO RE ASON TO FURTHER WITHDRAW SUMS OF RS.L ,50,000/- AND RS.7,50,000/- FOR PERSONAL EXPENSES I F SHE ALREADY HAD AS MUCH AS RS.5.00 LAKH ITA NO. 96/ASR/2017 (AY 2011-12) DALJIT KAUR V. ITO 5 CASH WITH HER. 1 THEREFORE SEE NO FORCE IN THE ARGU MENTS OF THE ASSESSEE AND NO REASON TO INTERFERE IN THE ORDER OF THE ASSESSING OFFICER. AGGRIEVED, THE ASSESSEE IS IN SECOND APPEAL. 5. I HAVE HEARD THE PARTIES, AND PERUSED THE MATERI AL ON RECORD. THERE IS NO REFERENCE TO THE HOUSE-HOLD EXPENSES OR ON PERSONAL FUNCTION/S AT HOME (RS. 4 LACS), OR EVEN ON THE ADDITIONS TO THE MARRIAGE PALACE OR ITS RENOVATION, I.E., THE STATED AVENUES OF MAJOR CASH EXPENDITURE INCURRED DURING THE YEAR BY THE ASSESSEE, OR POSSIBLY SO, IN THE FINDINGS BY THE RE VENUE AUTHORITIES. THIS IS AS THESE DIRECTLY IMPACT THE CASH FLOW STATEMENT FOR THE YEA R, ON WHICH THE ASSESSEE ESSENTIALLY RELIES IN EXPLAINING THE AVAILABILITY O F CASH WITH HER AT THE RELEVANT POINT OF TIME. THE ASSESSEE DURING HEARING PLACED BEFORE ME A CASH FLOW STATEMENT (FROM THE ASSESSEES AXIS BANK ACCOUNT) FOR THE RELEVANT YEAR, SHOWING WITHDRAWALS AT RS. 26.50 LACS (FROM 01/4/2010 TO 14/9/2010), SO TH AT SHE HAD SUFFICIENT CASH BALANCE WITH HER TO EXPLAIN THE CASH DEPOSIT OF RS. 5 LACS IN HER BANK ACCOUNT ON 17.01.2011. THE LD. CIT(A), AS INDEED DID THE AO BE FORE HIM, DID NOT FIND THE ASSESSEES EXPLANATION SATISFACTORY ON ACCOUNT OF T HE ASSESSEES VARYING STAND IN ASSESSMENT PROCEEDINGS, AS WELL AS THE FACT AS TO W HY WOULD ONE KEEP THE AMOUNT WITH HIM FOR FOUR MONTHS, SO THAT THE CASH DEPOSIT OF RS.5 LACS CANNOT BE SAID TO BE OUT OF, AS STATED, THE CASH WITHDRAWAL OF RS.12 LAC S BY THE ASSESSEE ON 14.9.2010. THE MATTER, IT NEEDS TO BE APPRECIATED, IS PURELY F ACTUAL, TO BE DETERMINED ON THE BASIS OF FINDING OF FACT, INCLUDING INFERENTIAL , BASED ON THE MATERIAL ON RECORD. WHAT TO MY MIND IS PARAMOUNT IS THE ASSESSEES COND UCT BORNE OUT BY THE MATERIAL ON RECORD, PRIMARILY THE BANK ACCOUNT ITSELF, AS WE LL AS THE ASSESSEES EXPLANATIONS FOR VARIOUS CASH WITHDRAWALS. IN FACT, THE NON-ACCE PTANCE BY THE LD. CIT(A) IS BASED ON THE OBSERVED INCONSISTENCY WITH REGARD TO THE CLAIM OF CASH-IN-HAND. THE ITA NO. 96/ASR/2017 (AY 2011-12) DALJIT KAUR V. ITO 6 ASSESSEE AND HER HUSBAND ARE, AS APPARENT, WEALTHY NRIS, HAVING PURCHASED PROPERTY WORTH RS.150 LACS DURING THE YEAR. THE ASS ESSEE IS NOT MAINTAINING ANY BOOKS OF ACCOUNT. THE STATED PURPOSE OF THE CASH WI THDRAWALS, MADE IN LACS OF RUPEES, RENDERED AFTER THREE YEARS, CAN, UNDER THE CIRCUMSTANCES, ONLY BE REGARDED AS TENTATIVE. OUT OF THE TOTAL WITHDRAWAL OF RS. 26 .50 LACS (I.E., DURING THE YEAR UP TO THE DATE OF THE RELEVANT CASH WITHDRAWAL), ONLY RS.1.50 LACS IS FOR AIR TICKETS. HOW COULD THEN IT BE SAID THAT THE BALANCE IS WHOLL Y CONSUMED? THE CASH WITHDRAWALS AND DEPOSITS ARE DURING THE SAME YEAR, INDICATING THAT THE SAME MAY BE FOR SOME PROPOSAL/S, WHICH MAY NOT HAVE MATERIALIZE D OR SHELVED OR COST THE ASSESSEE A LESSER AMOUNT THAN THAT ANTICIPATED, SO THAT THE BALANCE CAME TO BE DEPOSITED IN THE BANK. FOR EXAMPLE, EXPENDITURE LIK ELY TO BE INCURRED DURING TRAVEL; ON FUNCTIONS, ETC. THEN, IT COULD BE THAT THE CASH GIVEN TO RELATIVES, STATED TO BE A TEMPORARY ACCOMMODATION, IS RETURNED BACK. IT IS NO RMAL FOR PEOPLE TO SEEK HELP FROM CASH-RICH RELATIVES. THE COUPLE DOES NOT APPAR ENTLY HAVE ANY OTHER SOURCE OF INCOME IN INDIA. UNDER THE CIRCUMSTANCES, AN ADVERSE INFLUENCE, IN M Y VIEW, COULD BE DRAWN ONLY WHERE THERE IS SOME DEFINITE INFORMATION AS TO THE CASH SPENT ON A PARTICULAR EXPENDITURE, ASSET, ETC. THE REVENUE, TO MAKE OUT A CASE, OUGHT TO HAVE MADE ENQUIRY INTO SUCH EXPENDITURE, VIZ. ON RENOVATION ACCEPTED AT THE STATED AMOUNT OF RS.7.50 LACS; THE RELATED EXPENDITURE ON TRAVEL, FUNCTION/S, LIVING EXPENSES, ETC. (REFER PG. 5 OF THE ASSESSMENT ORDER), WHICH HAS NO T BEEN. IN ITS ABSENCE, I.E., WITHOUT CLARITY ON FACTS, IT IS MERELY DOUBTING THE ASSESSEES EXPLANATION, WHICH IS IN THE REALM OF A POSSIBILITY, CONSIDERING THE PROP ENSITY OF THE PEOPLE TO WITHDRAW CASH AND KEEP IT IN HAND FOR EXIGENCIES, PARTICULAR LY WHERE NOT USING INSTRUMENTS LIKE DEBIT OR CREDIT CARDS. THIS TENDENCY IS MORE P RONOUNCED IN INDIA, PARTICULARLY ITS COUNTRY SIDE, WHICH IS NOTORIOUS FOR INSISTENC E ON LEGAL TENDER AS THE MODE OF PAYMENT. AS EXPLAINED BY THE APEX COURT IN SAROJ AGGARWAL V. CIT [1985] 156 ITA NO. 96/ASR/2017 (AY 2011-12) DALJIT KAUR V. ITO 7 ITR 497 (SC), THE FACTS MUST BE VIEWED IN THEIR NAT URAL PERSPECTIVE, HAVING REGARD TO THE COMPULSION OF THE CIRCUMSTANCES OF A CASE. F URTHER, WHERE IT IS POSSIBLE TO DRAW TWO INFERENCES FROM THE FACTS AND WHERE THERE IS NO EVIDENCE OF ANY DISHONEST OR IMPROPER MOTIVE ON THE PART OF THE ASS ESSEE, IT WOULD BE JUST AND EQUITABLE TO DRAW SUCH INFERENCE IN SUCH A MANNER T HAT WOULD LEAD TO EQUITY AND JUSTICE. TOO HYPER-TECHNICAL OR LEGALISTIC APPROACH SHOULD BE AVOIDED IN LOOKING AT A PROVISION WHICH MUST BE EQUITABLY INTERPRETED AND JUSTLY ADMINISTERED. NO CASE FOR ADDITION IS IN MY OPINION MADE OUT. THE ADDITION IS, ACCORDINGLY, DIRECTED FOR DELETION. 6. IN THE RESULT, THE ASSESSEES APPEAL IS ALLOWED. ORDER PRONOUNCED IN THE OPEN CO URT ON JUNE 04, 2019 SD/- (SANJAY ARORA) ACCOUNTANT MEMBER DATE: 04.06.2019 /GP/SR. PS. COPY OF THE ORDER FORWARDED TO: (1) THE APPELLANT: DALJIT KAUR W/O TILAK RAJ, C/O SHER-E-PUNJAB RESORTS, VPO PADRANA, TEH. GARHSANKAR, DISTT. HOSH IARPUR (2) THE RESPONDENT: THE INCOME TAX OFFICER, WAR D-1, HOSHIARPUR (3) THE CIT(APPEALS)-1, JALANDHAR (4) THE CIT CONCERNED (5) THE SR. DR, I.T.A.T TRUE COPY BY ORDER